(Bloomberg) — European and US stock futures declined on Wednesday, as Asian equities suffered deep losses following a selloff in US peers driven by a plunge in Nvidia Corp.

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The Euro Stoxx 50 contract fell 1.3% while S&P 500 futures dropped 0.5%, extending Wall Street’s overnight losses. Asian chipmakers’ shares tumbled amid renewed concerns over the artificial intelligence frenzy, bringing a regional equity benchmark down more than 2%. Chip giants Taiwan Semiconductor Manufacturing Co. and SK Hynix Inc. slid at least 4% each.

The risk-off mood at the start of historically tough month for markets came as a closely watched US manufacturing gauge again missed forecasts, shifting investor focus toward the odds of an economic slowdown in the world’s largest economy. That added to an already-weak sentiment in Asia, where a run of disappointing Chinese data had been hurting risk assets.

“The extent of that Aug. 5 move probably burnt more than a few and it’s hard to get past those memories especially as the hard landing versus soft landing confusion is still unsettled,” said Charu Chanana, head of FX strategy at Saxo Markets in Singapore. “I would be rather cautious here” as soft data will raise recession concerns while positive data will ease rate-cut expectations, she added.

Treasury yields steadied after a tumble Tuesday. A dollar gauge snapped a five-day winning streak, its longest since April. The yen climbed higher. Oil pushed lower after a decline of almost 5% on Tuesday amid weak demand and oversupply concerns.

The early-August selloff turned out to be a pause in the bull market than the beginning of a prolonged slide, as growing expectations for US rate cut erased the slump in a matter of days. The recovery gained momentum following dovish comments from Federal Reserve Chair Jerome Powell at the Jackson Hole symposium.

Elsewhere in Asia, the Australian dollar held on to losses as data showed Australia’s economic weakness persisted in the three months through June.

Chinese stocks dropped after a private survey showed services activity expanded less than expected, the latest sign of the economy’s fragility.

The S&P 500 and the Nasdaq 100 saw their worst starts to a September since 2015 and 2002, respectively. With inflation expectations anchored, attention has shifted to the health of the economy as signs of weakness could speed up policy easing. While rate cuts tend to bode well for equities, that’s not usually the case when the Fed is rushing to prevent a recession.

Wall Street’s “fear gauge” – the VIX – soared.

“The harsh selloff on Wall Street was a stark reminder that September has a bad reputation for wavering risk appetite,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore, adding that the situation may be exacerbated by US recession risks and unwinding of the yen carry trade.

Traders are anticipating the Federal Reserve will reduce rates by more than two full percentage points over the next 12 months — the steepest drop outside of a downturn since the 1980s.

Marking the start of a busy week for economic data, a report showed US manufacturing activity shrank in August for a fifth month. Focus will turn to the key US jobs report due later this week. The data is expected to show payrolls in the world’s largest economy increased by about 165,000, based on the median estimate in a Bloomberg survey of economists.

The S&P 500 dropped to around 5,530 while the Nasdaq 100 lost over 3% as Nvidia tumbled 9.5% — erasing $279 billion in a record one-day wipeout for a US stock. The US Justice Department sent subpoenas to Nvidia and other companies as it seeks evidence that the chipmaker violated antitrust laws.

Key events this week:

• Eurozone HCOB services PMI, PPI, Wednesday

• Canada rate decision, Wednesday

• US job openings, factory orders, Beige Book, Wednesday

• Eurozone retail sales, Thursday

• US initial jobless claims, ADP employment, ISM services index, Thursday

• Eurozone GDP, Friday

• US nonfarm payrolls, Friday

• Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.5% as of 6:27 a.m. London time

• Japan’s Topix fell 3.5%

• Australia’s S&P/ASX 200 fell 2%

• Hong Kong’s Hang Seng fell 1.3%

• The Shanghai Composite fell 0.6%

• Euro Stoxx 50 futures fell 1.2%

• Nasdaq 100 futures fell 0.7%

• Australia’s S&P/ASX 200 fell 2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro rose 0.1% to $1.1058

• The Japanese yen rose 0.2% to 145.15 per dollar

• The offshore yuan rose 0.2% to 7.1093 per dollar

• The Australian dollar fell 0.1% to $0.6704

• The British pound was little changed at $1.3117

Cryptocurrencies

• Bitcoin fell 2.9% to $56,526.98

• Ether fell 3.3% to $2,380.64

Bonds

• The yield on 10-year Treasuries was little changed at 3.82%

• Japan’s 10-year yield declined 3.5 basis points to 0.885%

• Australia’s 10-year yield declined seven basis points to 3.93%

Commodities

• West Texas Intermediate crude fell 0.5% to $69.98 a barrel

• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rob Verdonck and Joanna Ossinger.

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